Taiwanese computer-maker Asustek Computer is contemplating the
use of Windows 8 from the world's largest software maker
If there is a successful negotiation, Microsoft's latest OS
would find another growth avenue in the Asian market. Windows 8
will be used in Asustek's Padfone, which is combination of a
smartphone and tablet.
Asustek Computer Inc. was founded in 1989. Its vast product
portfolio includes desktops, laptops, mobile phones, monitors,
motherboards, servers, tablet PCs and video cards. In terms of PC
sales, it lags
) and Acer. It also manufactures Nexus 7, a tablet range from the
search engine giant
Asus will sell its second generation Padfone in the Chinese
markets at a steep price tag of $686. Asus's Padfone will
directly compete with
) iPhone 5 and Samsung's Galaxy Note. Currently, the hybrid
versions of the smartphone-tablet have seen mixed success with
IHS iSuppli, an independent market research firm, expecting 60.4
million units to ship this year, a 136% jump from last year's
shipment of 25.6 million units. China is one of the largest
markets for mobile devices and growth rates are expected to be
very strong here.
The PC makers are currently changing their business strategy,
as PC sales are showing no sign of recovery. Consumers have
changed their preferences from PCs or desktops to smartphones or
tablets. As per marker research firm IDC, the global PC market
contracted 8.6% year over year in the third quarter of
2012. However, the smartphone market saw a 2.4% jump in the same
period with 444.5 million units of smartphones shipping
Microsoft claims that it has sold 60.0 million Windows 8
licenses , will behind market leader Android. According to
Gartner, Android made up 72.0% of the smartphone sales in the
third quarter of 2012. However, with Nokia commanding 19.2% of
the market share coupled with success of its Lumia range of
models, Microsoft's Windows based OS can see some upside.
IDC is expecting that Windows-based phones may become the
fastest growing smartphone OS as it is projected to jump from
2.6% in 2012 to 11.4% in 2016.
Currently, just like other PC makers, Microsoft is also
battling the slump in the PC market caused by the sluggish
economy. In addition, the popularity of tablets from Apple and
Google have been cannibalizing PC market sales, leading to
further deterioration of the scenario. Whether Microsoft sees
notable success this year remains. The success of the licensing
deal with Asustek can open up further such licensing deals with
other PC manufacturers for Microsoft in the future.
Microsoft reported revenue, excluding deferrals, of $16.01
billion in the first quarter of fiscal 2013, down 11.4%
sequentially and 7.9% from the year-ago period. Revenues also
missed the Zacks Consensus Estimate by 2.5%.
Microsoft has a Zacks Rank #3 (Hold).
APPLE INC (AAPL): Free Stock Analysis Report
DELL INC (DELL): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis
HEWLETT PACKARD (HPQ): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
To read this article on Zacks.com click here.